Good morning, everyone, and welcome to Aker Solutions presentation of the first quarter results for 2021. My name is Marianne Hagen, and I head up sustainability and communication functions. With me here today is our CEO, Kjetel Digre, and our CFO, Idar Eikrem. They will go through the main developments of the quarter. In addition, Mr. Digre will give you an update of market outlook and the opportunities we see, including some insights in our offering to the offshore wind power market. We will also have time for some questions after the presentations. You may submit questions on the webcast platform. Before Kjetel takes the stage, please watch this.
Thank you, Marianne, and good morning, everyone. We are pleased with the development in the quarter. The main message is that Aker Solutions is on track on all key indicators. Firstly, our financial results are where they should be compared to our guiding for 2021. The revenue in the first quarter was NOK 6.5 billion, with EBITDA of NOK 427 million. Secondly, our order intake and backlog has increased, providing the foundation for the profitable growth we have guided for for the coming years. We have delivered an order intake of NOK 9.4 billion. That is a solid 1.5 book-to-bill ratio, and that brings the order backlog up to NOK 41 billion. Thirdly, the strategic development of the company is also on track. Alliances and partnerships are important parts of our strategy, and during the quarter, we signed an MoU with Doosan Babcock.
Together, we are already in dialogue with several customers regarding upcoming developments in the U.K. for sustainable energy and carbon reduction projects. Prospects include both hydrogen production plants, CCUS facilities, and optimization of climate footprint from other industrial installations. Now, let me comment on operations in the period. Also in the first quarter, COVID-19 has influenced our activities, but we have mitigated much of the effects through close collaboration with local health authorities and impressive dedication from our own employees. We are working closely with our customers to manage the pandemic while we progress with ongoing projects. One of these was the subsea systems for Johan Castberg, where we have delivered five standardized subsea trees out of the order for more than 30 trees plus associated equipment and systems.
For the Ærfugl subsea project for Aker BP, we have completed the manufacturing of subsea trees on time and below budget. For the Lingshui project offshore China, we have this period completed the deliveries of several umbilicals. At the same time, we have completed the EPC phase for the Johan Sverdrup Phase 2 jacket to Equinor, and it's now ready for the installation phase. In parallel, we also managed to keep the planned fast-track progress for the Hod unmanned wellhead platform to Aker BP. Both the jacket and the topsides on this lightweight industrialized solution is on schedule for load out this summer. We are also moving forward with Njord A, Johan Castberg, and the large new module for Phase 2 of Johan Sverdrup. Now let's review the key new orders. We've had several important wins this quarter, including energy transition projects.
One of these is on the Empire Wind FEED contract. We have been involved in developing the concept and matured it further through pre-FEED work for this prospect offshore New York for Equinor and BP. The award of the FEED contract now into the first quarter shows that these key customers recognize that we have leading expertise for both offshore wind power and for solutions based on concrete technology. We also continue to reinforce our strong market position for decommissioning of old offshore installations from the Northeast Atlantic. In the new contract for Heimdal and Veslefrikk, the platforms will be recycled at Aker Solutions decommissioning facility in Norway. The largest order intake in the quarter was in the EMM segment.
The contract for electrification and modifications on the existing Troll West platform illustrates how the energy transition and low carbon solution is becoming a big part of all our segments. Our experience from Troll West will also give us a strong position for similar contracts coming up. Another important award for EMM is the modification of the topsides on the Åsgard B semi-submersible production platform. In the subsea segment, we also won important contracts. One example is the Eldfisk field development, which will include 13 subsea trees. This contract for the leading international operator, ConocoPhillips, is also yet another confirmation of the strong market position we have gained for our standardized tree design. Also within subsea, we received a new order from ENI for a total of 18 kilometers of steel tube umbilicals for Agogo field development offshore Angola.
I will then ask Idar to give some further insight into the first quarter financials before we look at market opportunities.
Thank you, Kjetel. Good morning. I will now take you through the key financial highlights of the first quarter, our segment performance, and run through our financial guidance. As always, all numbers mentioned are in Norwegian kroner. Let me start with the income statement. The first quarter revenue was NOK 6.5 billion versus NOK 8.6 billion a year ago. This relates to the phasing of our project portfolio, where several large projects were finalized last year. At the same time, we are only in early phases of execution of our recent order intake. We expect activity levels to ramp up in the second half of this year and into next year as we continue to progress on our project portfolio. The underlying EBITDA was NOK 427 million, up from NOK 163 million a year ago.
At the end of the quarter, we received a payment of NOK 698 million from the Nordsee Ost arbitration ruling. This had a positive effect on our EBITDA of NOK 125 million in the period. The underlying EBIT was NOK 168 million, up from -NOK 185 million a year ago. Net financial items in the period included a positive effect of NOK 147 million from the arbitration ruling. The income tax expense in the first quarter resulted in a high effective tax rate due to withholding tax in Angola and some other non-deductible items. We ended the quarter with a net income excluding special items of NOK 34 million and earnings per share at NOK 0.07.
Now moving to our balance sheet and cash flow. We ended the first quarter with a strong cash flow performance and financial position. Our working capital ended at -NOK 118 million, and our cash flow from operation was NOK 482 million.
Cash inflow from investing activities was NOK 168 million. As I mentioned earlier, this include NOK 147 million in interest income related to the arbitration ruling. Net interest-bearing debt to EBITDA is robust at -0.8x , well below our leverage covenant of 3.5x . Our financial position was solid, with a net cash position of NOK 794 million and a liquidity buffer of NOK 8.5 billion at the end of the quarter. Over to the segments. For renewables and field development, the first quarter revenue was NOK 2.8 billion, down from NOK 3.1 billion a year ago. The underlying EBITDA was NOK 248 million with a margin of 9%. This include the positive effect of the arbitration ruling. As a reminder, the first quarter last year was negatively impacted by significant COVID-19 costs and provisions.
The order intake was NOK 2.6 billion, or one times book-to-bill, mainly driven by unannounced orders and additional scope in existing contracts. The activity level in this segment is expected to be somewhat lower in the second half of the year. This is simply due to the phasing of our project portfolio, where some projects are finalizing and recent awards will still be in early phases of execution. This also go for the margins for this segment, where we typically book margins after 20% progress on each project. This segment is currently experienced high tendering activity and has important front-end work ongoing, including positioning for large opportunities like Empire Wind and Norfolk offshore wind. For the EMM segment, the first quarter revenue was NOK 1.9 billion, down from NOK 2.7 billion a year ago, driven by the finalization of large modification and hookup projects during last year.
The underlying EBITDA was NOK 76 million with a margin of 4.1%. The order intake was very strong at NOK 4.1 billion, or 2.2 times book-to-bill. Our backlog is strong at NOK 19 billion. The activity level in this segment is expected to increase slightly in the second half of the year on the back of ongoing projects and recent awards. In the subsea segment, the first quarter revenue was NOK 1.9 billion, down from NOK 2.9 billion a year ago. We expect activity level in subsea to increase in the second half of this year and into next year, with progress ramping up on recently awarded projects.
The underlying EBITDA was NOK 172 million, with a margin of 9%. Order intake was strong at NOK 2.8 billion, or 1.5 times book-to-bill. The backlog is healthy and close to NOK 12 billion. The subsea segment is currently experiencing high tendering activity, including some significant international fields ongoing.
Over to the order intake and backlog performance. The order intake was strong in the first quarter at NOK 9.4 billion or 1.5 times book-to-bill. This was a growth of 19% compared to last year and 39% compared to the fourth quarter. Our backlog increased to NOK 41 billion, and therefore visibility moving forward has improved. As a reminder, our backlog excludes book and turn service work and potential growth in existing contracts. To sum up, in first quarter we delivered improved earnings, increased cash flow, and increased order intake. We believe this demonstrate that we are on track with our strategic ambitions that we have set out. We also continue to deliver on our strategy of being a leading execution partner for both existing oil and gas markets and in emerging energy industries. Our guidance for 2021 remains unchanged.
Based on our current project portfolio, our ongoing FEED and tendering activity, we continue to see our 2021 revenue somewhat lower than last year. Underlying EBITDA margin continued to be seen up from last year to around 5.5%-6% level. The outlook for project sanctioning for the rest of the year and into next year remains positive. We have a strong position in active markets, both in the traditional oil and gas segments and related energy transition. This continues to put Aker Solutions in a good position to take full advantage of market opportunities ahead. With that, I hand it back to Kjetel.
Thank you, Idar. Let us move to the outlook. We all see the growing demand for energy. Our customers in most of our key regions around the world are planning to sanction new and highly relevant projects. With our technologies, products, expertise, engineering capabilities, and effective project execution, we are the solution to realize these plans. With our global setup, we are well positioned for this market development. We are carefully targeting many of the most interesting opportunities. One of the most active regions with many opportunities the coming years is of course the Norwegian Continental Shelf. This is also a region where we have a particularly strong offering and capability to deliver execution of complete projects. As we have communicated in previous quarters, we expect to see the sanctioning of more than 30 new oil and gas developments.
Almost all of these will include solutions for reduced environmental footprint. As you can see on the slide, the awards are already happening with Troll West electrification and Eldfisk as the latest additions. There are still many key projects on this list where we expect to see awards both this year and the next year. Several of these developments are large, and many of them represent opportunities where we can demonstrate new solutions with global potential. We are actively positioning for these prospects, and we are already involved in early phase work on many of them. Together with the market development in Norway, we also see that a number of new oil and gas projects are coming up in the international regions where we already have a solid presence.
Last year, we announced our objective that within 2025, one third of our total revenues will come from renewables and low carbon projects for oil and gas. Within 2030, this will count for two thirds of our total revenues. I'm pleased to say that we are on track also for this part of our strategy, and we progress with new steps quarter by quarter. About 35% of the first quarter order intake was related to energy transition business. For new contracts, we are currently working on tenders with a total value of more than NOK 78 billion. In the first quarter, about 30% of the bids we are working on were related to energy transition projects. Let me show some examples of how our activities for such new solutions have already progressed to key milestones.
For Chevron's planned Jansz project offshore Australia, we are well on the way with the FEED we are delivering for a subsea compression system, gas compression system. The concept is based on a copy of the subsea system we have previously delivered to the Åsgard field. We have demonstrated that our world-leading technology can contribute to significantly reduce CO2 emissions from the production. This is increasingly relevant in new projects globally. For the Norwegian Longship project, for the full-scale carbon capture and storage, we are involved through the entire value chain. For the carbon capture facility at the cement factory in Brevik, we are executing the engineering for our customer, Aker Carbon Capture, and for the Northern Lights CO2 handling and storage system, we are delivering the EPC scope for Equinor's onshore handling facility.
To Northern Lights, we have the EPC contract for the subsea systems that will enable injection of CO2 for storage deep down in the seabed. Vattenfall has announced that Aker Solutions in a consortium with Siemens is their preferred bidder for development of the Norfolk offshore wind power zone in the North Sea. If Vattenfall starts the development of one of the world's largest offshore wind farms, our scope will include deliveries of large HVDC converter platforms. I've already mentioned the new contracts to decommission the old offshore platforms from the Heimdal and Veslefrikk fields. We have one of the industry's best facilities for decommissioning at Stord, and we typically recycle or reuse more than 98% of the materials we receive. Steel materials alone, we typically recycle more than 15,000 tons in decommissioning every year. This represents a significant contribution to the circular economy.
We have a solid position in this market. We expect to see an increase in the number of old installations coming up for decommissioning. For the Empire Wind project, where we just got a new contract, it is decided that most of the installations will be placed on concrete foundations standing on the seabed. Most countries planning offshore wind power developments are looking for solutions that can also contribute to a high local content. Not all countries have yards that can take on project with large steel structure construction, but almost all countries have a construction industry and local access to concrete. With our documented position as the world's leading expert on advanced use of concrete for marine prospects, we are increasingly invited by customers to discuss how we can help them execute on their project plans.
For Arctic Offshore farming, we have also in this first quarter progressed with our work to assemble two large offshore fish farming facilities, and we see opportunities for several fish farming projects coming up. In some regions, including in Norway, electrification of the energy supply on offshore oil and gas platforms is a large contribution to reach national targets for reducing emissions. Our new contract for electrification of Troll West for Equinor will further build our expertise and market position for upcoming similar projects. The Hywind Tampen for Equinor is currently the world's largest project for offshore wind power based on floating units. Aker Solutions has the EPCI contract for delivery of the 11 hulls. Since the award of the contract in 2019, we have completed engineering and the construction of the first 20 meters.
In the next phase, we will continue slip forming until each of the cylindrical hulls have a height of impressive 107 meters. With our growing activity for offshore wind power, we are also well-placed for many of the projects that are now coming up. Our offering to the offshore wind power market builds on our already well-established expertise and capabilities that we have proven in the oil and gas market. We span front-end, detail engineering, construction, as well as installation, commissioning, operation, and maintenance. Aker Solutions is one of very few contractors who can offer the customers complete EPCI deliveries for both fixed and floating solutions for wind turbines and both fixed and floating converter platforms. The same solutions can also be based on concrete substructures, where we have a world-leading technology.
From our advanced manufacturing sites for subsea, we can also deliver subsea substations, cables, and umbilicals for infrastructure to offshore wind farms. In terms of magnitude, we see that the converter platform will often be at the same scale as an oil and gas platform. This means that some of the converter platforms can have a top side of 15,000 tons-20,000 tons and a jacket substructure of 10,000 tons-15,000 tons. Alternatively, the substructure may be a floating hull, for example, a semi-submersible similar to proven solutions used for oil and gas fields. We anticipate that our scope for several upcoming offshore wind power projects, and in particular for HVDC platforms, will be comparable to projects we have executed many times for oil and gas. In my opinion, we have a unique position for delivering relevant and competitive solutions to our customers.
Let's look at some numbers for opportunities we are pursuing. In the first quarter, the tendering activity has further increased, as already mentioned. Of the total bid pipeline, we have a good balance of bids between our regions and segments, and we are also basing our tenders on standardized products and solutions for projects where this is applicable. We have a selective tendering process with focus on projects where we can really make a difference and create value for our customers and make sound margins. Our customers are now moving to conclude key decisions related to new prospects, both for traditional and low-carbon oil and gas developments, as well as for renewables. Let me sum up. We delivered a quarter with improved earnings, solid order intake, and a robust backlog with an increasing share of energy transition business.
We will move forward with top performance within HSSE and quality, as this is both a key value for us and part of what makes us competitive. While we grow in new segments, we will maintain our already strong position within oil and gas. The outlook for project sanctioning for 2021 and 2022 remains positive in our main markets, both in traditional oil and gas and related to energy transition. We are experiencing high demand for our front-end capabilities. Many of the ongoing early phase studies are expected to lead to front-end engineering and design work in the second half of this year. Looking ahead, while some near-term restrictions related to COVID-19 pandemic remain, Aker Solutions sees increased market activity across all our segments. The outlook for 2021 remains unchanged, and we are on track with respect to all our targets.
With that, thank you for listening, and now we can take a few questions.
Thank you, Kjetel, and thank you, Idar. We have a few questions, including an application for a job in engineering. Three of the questions are on the same topic on the margin guidance. They are from Øystein Vaagen, Magnus Olsvik, and Haakon Amundsen. I'll read one of them. Your margin guidance for 2021 includes the NOK 125 million impact from Nordsee Ost. Hence, it appears your underlying margin expectations are lowered slightly. Can you give some color on this? Has your expectation for the exit rate for 2021 changed?
Yes, I can give you a bit more insight into it. The NOK 125 million from the arbitration is, of course, included, represent 0.5% in the margin. We have maintained the 5.5% to 6%. The underlying situation is unchanged. This will probably put you more in the upper level of the range instead of the lower level of the range. It's still early days of 2021, we will be happy to come back with a further update at a later point in time.
Thank you. The second question is from Victoria McCulloch, the question is, you mentioned a strong tender pipeline in your release today. Could you talk a bit more about the bidding environment, what you are seeing in terms of margins and bidding behavior? Thank you.
First of all, as we've said throughout the presentation, we see that things are moving in the right direction with a lot of exciting opportunities, both with our existing customers, key customers, but then also new ones. What we are experiencing really based on our own approach towards these opportunities is to make sure that we are in good control and understanding of the task. We are basing our offers on what we know, what we have of technology, and where we can repeat our successes. Obviously understanding the risk together with the client, making sure that that is priced in the best possible way and that we, all in all then, are getting on board in these two new opportunities with the sound margins that we have decided upon. I guess you also, Idar, can perhaps add a few words.
Yeah, no, we have a very positive market outlook and in all the segments and whatever project we are looking at, we are aiming for healthy margins when we bid on project. We are not buying work, we are entering into it with healthy margins.
Thank you. The next question is from Frederik Lunde. Are you seeing inflation on input factors? With a net cash position, is there any reason not to expect dividends for 2021?
I can probably start with the dividend part of it. As we announced last quarter, dividend policy will be reviewed and updated every year, and the next time will be at the end of the year. Stay in there and we will give you an update at the end of the year.
Thank you.
I think on the inflation part, if that is then due to the input factors and prices and the likes, I think our approach, in a responsible fashion and also together with our clients, is actually to understand how this is moving. When things are looking good and activity picks up, that is bound to be a pressure on the supply chain and some key factors. We are then focusing on being there in well advance of understanding it and then freezing the input and also, as I alluded to in my presentation, make sure that we have the right type of partnerships with the different suppliers entering into these tasks together with us so that we have this in a good control.
Thank you. The next question is from Ole Petter Skonnord. Do you still have the cooperation with Nel in the hydrogen area?
No, we have agreed that that will come to an end, we are currently working on the studies that we had together and closing them off in a good fashion. We are looking at other opportunities basing on our own competence and the opportunity pipeline that we see ahead of us.
The last question is from Shephard Gandhi, and it reads, l ooking at the ever-growing demand for renewable energy sector, are we in the position today to say with the confidence that we have the right resources with the needed competency to take a leading position in this sector? Are there any resource development plans on those lines, maybe any R&D efforts?
I think it's almost like saying yes to all those questions. It needs some more details to it. My belief is that the core of Aker Solutions and the broad offering, the long history, and what we have developed out of methodology and a solid way of performing projects to our customers is our starting point. Then when entering into new markets, new customers, and then also tackling new challenges, we obviously need to check with ourself if we are relevant in the current version or if we have to change. We're entering into renewables. One of the biggest things that we are really investigating and are on track on actually solving is obviously to become an even more competitive version of ourselves in our yards, in the engineering organization, and then delivering construction and commissioning towards our clients. We are on that kind of journey.
In addition, we are working heavily on the digitalization of our methodology and also a digital design for our clients, which is also then clearly showing that we are relevant for all of these new tasks.
Just to add to that one, in addition to what Kjetel mentioned, of course, a vital part of our strategy is also partnering up with other companies in order to have a complete and good offering in all of our segments, including renewables, and we have had interesting developments during the quarter in that regard.
Thank you, Kjetel. Thank you, Idar. Thank you all for joining us this morning.